Good Evening! On Tuesday, stocks were down overall, as Apple commenced its highly anticipated fall event and investors eagerly awaited the release of crucial inflation data on Wednesday.
The day ended with all three indexes in the red with the Nasdaq Composite falling the most by 1.04%, the S&P 500 decreasing 0.57%, and the Dow Jones barely sliding into the negative, down 0.05%.
SNACK SENSATION
J.M. Smucker (SJM), an established jelly manufacturer, made an announcement about its acquisition of Hostess Brands (TWNK), a renowned provider of plastic-wrapped cakes, for a substantial sum of $5.6 billion.
When will it happen and why now? The deal is set to be finalized by the end of January. The acquisition has a value that exceeds Hostess’s market worth by around $2 billion. So why? The snack industry had a significant growth of 11% in the previous year, as reported by Circana Group. In light of this, Smucker is seeking to capitalize on the increasing popularity of snacks. During the period from 2019 to 2022, Hostess had a substantial increase in revenues, up 50%.
Times are changing! The snacks industry is now undergoing a process of consolidation, as seen by the recent acquisitions made by Mars and Unilever in firms that specialize in snack products. In a further indication of the growing popularity of snack-sized food items, the board of directors of Kellogg’s made the decision yesterday to establish a separate entity named Kellanova, which would focus only on the segmentation of their chips and treats.
GOOGLE IT
The Justice Department presented its case in a Washington courtroom, asserting that Google engaged in anti-competitive practices within the realm of online search. This antitrust case has the potential to establish unprecedented restrictions on the considerable influence wielded by a major American technology corporation.
The Justice Department argument. According to Kenneth Dintzer, the deputy director for the civil division of the Justice Department, there is evidence indicating that Google intentionally modified contracts to maintain its position as the default search engine on both desktop and mobile devices, including the iPhone. Additionally, these contracts limited the ability of Apple, the manufacturer of the iPhone, to develop as a competitor in the search market.
Google counterargument. The defense counsel for Google said that customers pick Google as their preferred search engine because of its high-quality search results. Furthermore, the attorney emphasized that users had the freedom to use other search alternatives on both Apple and Android devices.